1% To Flee New York? We’ve Seen This Story Before

This essay appeared in the Oct. 23, 2025 edition of UNFTR’s premium newsletter. Become a UNFTR member to receive our bonus newsletter each week and for other perks.

One year after the coronavirus pandemic gripped the world, the New York State government, still grappling with the related economic fallout and healthcare crisis, decided that the best way to fund critical programs was through a tax hike on millionaires.

Specifically, single individuals making more than $1 million and couples earning $2 million or more would see a tax rate increase of less than 1%. While a modest bump for high earners, the tax hike, along with the creation of two new tax brackets for people making more than $5 million and $25 million, respectively, was estimated to bring in $4.3 billion to the state.

The governor who signed that budget into law? King Andrew Cuomo. For the political scion, it would be the last budget he’d preside over. Later that summer, he resigned his office amid a forthcoming impeachment inquiry over several sexual assault allegations that rocked Albany.

Now, Cuomo, who only started living in New York City “full time” (in an apartment once occupied by his daughter) shortly before formally announcing his bid to run for mayor, is among the loudest critics of Zohran Mamdani’s proposal to tax the rich to fund programs to boost the working class, including universal childcare, fare-free busing, and creating five city-owned grocery stores.

The tax hikes—increasing the corporate tax to 11.5% to match New Jersey, and a 2% tax on those earning more than $1 million—have the corporate class, represented by hedge fund bro and erstwhile tennis pro Bill Ackman, very mad. They’re so mad, in fact, that they’re warning of a mass exodus, the likes and scale of which we purportedly have never seen before.

Ackman, known for his grandiose, term paper-length missives on X, is most aggrieved, and he wants everyone to know it. He’s also spent handsomely to try and get Cuomo elected, including a recent $1 million donation to a super PAC backing the former governor.

To no one’s surprise, Cuomo is very much aligned with the donor class’s anti-Mamdani attacks.

“You keep taxing businesses and wealthy people in New York City, there will be nobody left,” Cuomo recently told Fox News.

The Murdoch empire’s corporate protectionist tabloid, The New York Post, ran a hysterical editorial in August condemning Mamdani’s proposals.

“So if Mamdani gets his way, there soon might be no one at all left to squeeze,” the paper’s editorial board cried.

And for what it’s worth, a seemingly very anxious Ackman lodged his complaints directly with Bari Weiss’s The Free Press (now owned by Paramount, whose CEO is conservative megadonor Larry Ellison’s son, David), according to an X post from Olivia Reingold, one of its writers:

“If Zohran Mamdani wins, several billionaires told me they’ll leave NYC—or at the very least spend more time outside it to avoid city taxes.

 

“‘It only takes a handful of successful people to leave to decimate the city’s tax base,’ said @BillAckman (who plans on staying in NYC)”

Strikingly, the uproar over Mamdani’s tax plan, which would have to be approved by the state, comes amid massive income inequality in New York State in particular.

According to a state-by-state analysis by the left-leaning Economic Policy Institute (EPI), New York leads all states in income inequality. New York County, which includes Manhattan, has the highest wealth disparity in the entire state, with the top 1% making 113 times more than the bottom 99%.

More broadly, EPI said the top 1% take home an astonishing 31% of all the income in the state.

As the corporate class groans over Mamdani’s pro-working-class agenda, it’s fair to question whether threats of a wave of out-of-state migration from the most well-off have any basis in reality.

To test this, we have to look no further than what happened after Cuomo signed the 2021 tax increases into law.

This month, the Albany-based Fiscal Policy Institute (FPI) released its analysis of tax data from 2023—which takes into account the tax hikes passed in 2021—and found that “top earners are moving away at a lower rate than all other New Yorkers.”

“We see that the overall proportion of income earned by millionaires was 25 to 30 percent before the 2021 tax hike and—excepting 2021 itself, in which the stock market performed unusually well—remained at 25–30 percent for the following two years,” FPI wrote. “This confirms that tax revenue from top earners did not increase simply because their share of income in the state increased but because their tax rates were raised.”

While it can only theorize as to people’s motivations for moving out of state, the organization added: “[T]he fact that revenue clearly increased after a tax hike on high earners provides substantial evidence that the benefits of increasing taxes at current rates outweigh the negative consequences warned against by fiscal hawks.”

In recent years, conventional wisdom has held that wealthy New Yorkers were more inclined to leave for purportedly greener pastures during the pandemic. There’s no arguing that many New Yorkers left the state during the health crisis, including those with higher salaries. But that’s often treated as the end of the story. In fact, according to FPI, “those earning over $5 million saw out-migration rates return to pre-pandemic levels faster than any other group, further affirming that taxes do not drive wealthy New Yorkers to leave.”

The tax data analysis is consistent with previous FPI research. In 2023, Nathan Gusdorf, its executive director, said that the rich “typically leave at one quarter the rate of the general population in normal, non-COVID years,” adding: “The evidence dispels the myth that the rich are moving away in search of lower taxes. This analysis finds that tax hikes do not provoke any significant increase in high earner migration out of the state—and when high earners do leave, they are more likely to move to other relatively high tax states than to a low tax state.”

For his part, Mamdani has been consistent in talking about the need to improve the lives of the working class. As for Ackman, well, what is Mamdani to do but laugh?

That’s exactly what happened during his recent appearance on the Flagrant podcast, hosted by former Democrat and 2024 Trump voter Andrew Schulz. As the two joked that Ackman isn’t going anywhere if Mamdani is elected, the mayoral hopeful, as he’s apt to do, put the entire debate into perfect context:

“He’s spending more money against me than I would tax him!” he said as the podcast bros clapped and laughed, adding, “I don’t even want that much. He’s going above and beyond.”

Watch our April 2025 interview with Mamdani.

Image Source

• Daniele Pieroni, CC BY-SA 2.0, via Wikimedia Commons. Changes were made.